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Opinion Contributor

Help Medicare to thrive under ACA

CBO estimates that raising the Medicare eligibility age to 67 saves only $67 billion by 2019.. | AP Photo

By REP. JOE COURTNEY | 11/28/12 9:42 PM EST

As we approach the edge of the fiscal cliff, Medicare — the health insurance program for America’s seniors and disabled — is in the cross hairs. Former Republican vice presidential candidate Rep. Paul Ryan authored a budget that called for Medicare to be turned into a voucher program. Others have called for new co-pays for skilled nursing or home health care.

In addition to passing on higher bills to beneficiaries, these and other proposals ignore the reality that the Affordable Care Act is already reining in Medicare growth, extending its solvency and putting us on a firmer fiscal footing.

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Here are the facts. Medicare spending per beneficiary, for the past two decades before 2008, rose much more than inflation, in general, year in and year out. The growth was as much as 7 percent in 2006 and stayed above 5 percent through 2008. That rate, combined with a growing elderly population, eroded the program’s long-term financial prospects. But beginning in 2010 after passage of the Affordable Care Act, the trend changed dramatically. Per capita spending inched below 4 percent in 2010 and has been below 3 percent ever since.

Today, Medicare is defying predictions by the nonpartisan Congressional Budget Office, which, at the time of ACA passage, assumed 4 percent annual cost growth in Medicare spending per patient. In 2009, the CBO projected Medicare spending to total $6.04 trillion between 2012 and 2019. Two years later — after the better-than-expected, lower spending — CBO projected Medicare’s costs to be approximately $5.54 trillion over the same period. To put that $500 billion in savings in perspective, CBO estimates that raising the Medicare age of eligibility to 67, saves only $67 billion between now and 2019. The ACA’s “bending the cost curve” produces significantly higher deficit reduction than any of the cuts currently pushed by Republicans, including Ryan.

Readers' Comments (3)

Excellent article. I think the jury is still out on how well the structural reforms of Medicare in the ACA are working, but it is nice to hear that we may be on the right track.

And he's exactly right... we need more of the structural reforms along the lines of what the ACA does, and not just throw up our hands, shifting costs onto seniors or forcing them into the private sector.

We need to figure out how to make health care cost less in this country. That's all there is too it. Frankly, the private market on its own has not demonstrated much ability to figure this out. There is a role for government in setting up appropriate incentives such that best practices quickly spread through the industry.

We need to figure out how to make health care cost less in this country. That's all there is too it. Frankly, the private market on its own has not demonstrated much ability to figure this out. There is a role for government in setting up appropriate incentives such that best practices quickly spread through the industry.

You got it exactly backwards, J.

Thelarger the role of Government in Health Care, the higher the costs..............

The private market figured it out YEARS ago.

It's called making people have a financial stake in their medical decisions..........

You got it basically right, here's the real savings driver: the best way to lower costs is to higher public health. And, the main new activity of the ACA is to measure everything so it can finally be managed.